The Impact of Hudson River Park on Property Values
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Commissioned by THE IMPACT OF HUDSON RIVER PARK ON PROPERTY VALUES Friends of Hudson RIver Park 311 West 43rd Street Suite 300 New York, NY 10036 T. 212.757.0981 F. 212.757.0985 FALL 2008 www.fohrp.org [email protected] STUDY REPORT BOARD OF DIRECTORS Douglas Durst Arthur E. Imperatore Jr. David Tewksbury THE IMPACT OF HUDSON RIVER PARK ON PROPERTY VALUES Ross Graham Ben Korman Tim Tompkins Co-Chairs John Krevey Robert Trentlyon William J. Zwart Matthew Mayer Peter Tully Treasurer Francis X. McArdle Madelyn Wils John Doswell Vince McGowan Joshua Zamir Secretary David Redden Richard Dadey Steven Salsberg A. J. Pietrantone Assistant Treasurer Arthur Schwartz Executive Director Robin B. Shanus Douglas E. Sarini Assistant Secretary Tobi Bergman Meta Brunzema Friends of Hudson River Park acknowl- us with incisive input that Acknowlegements Albert Butzel edges with gratitude the support of The is central to the work James Capalino J. M. Kaplan Fund, which financed this we did and the findings Cynthia Coulson report and the work that underlies it. we have reached. Tom Fox We also acknowledge with Thanks also to Andy Manshel, thanks the generous contribution by the who served as a consultant for the Real Estate Board of New York (Steven study and whose input provided some Ross, Chairperson, Steven Spinola, of the most important insights reflected President, Michael Slattery, Senior Vice in this report. President for Research) of the sales Finally, thanks to the Regional transactions data used in this report, all Plan Association (Robert Yaro, President, of which were provided to us at no cost. Robert Pirani, Director of Environmental Friends is also grateful to all Programs, L. Nicolas Ronderos, Senior the members of the project Steering Planner), which prepared the data Committee, who served loyally and analysis and was very much Friends’ without compensation and provided partner in this endeavor. > The study identified the area 3 blocks in from the Hudson River Park as the “Primary Study Area.” < The Greenwich Village esplanade and Bow Notch Bridge, 2006 Cover Photo: Tom Fox Table of Contents 1 Introduction 5 Findings 7 The Study Process 7 The Hypothesis and Initial Investigation 8 The Study Methodology 8 Definitions and Data Gathering 11 The Analysis 17 Discussion of Results 17 General Context – Real Property Values in Manhattan and on the West Side 17 Property Value Increases in the Primary Study Area and Comparison Areas 21 Property Values Increases Attributable to Hudson River Park 23 Next Steps 29 A Hudson River Park Business Improvement District 31 Bibliography 32 Brief Bios for Steering Committee Members & Consultants < Abandoned piers marred the West Village waterfront. Pier 49, 1978 Photo: Shelley Seccombe Shelley Photo: > Views of rebuilt Piers 45 and 46 from new buildings recently opened on the Greenwich Village waterfront, 2004 Photo: Luca Vignellil Photo: For many years, Park Conservancy, an agency created in Village began almost immediately – in the advertised prices for the new condo- Introduction Manhattan’s West Side 1992 pursuant to a memorandum of October 1998. However, while adequate miniums – suggested that the added waterfront south of understanding in which the State and funding was available, regulatory hurdles value was substantial. Moreover, from 59th Street was the center of New York the City also agreed to jointly finance slowed the Trust’s capacity to move the level of construction activity along City’s teeming maritime commerce. the project. The City had committed construction ahead quickly, and it was the new park, it was also apparent that By 1970, however, containerization had $100 million to the project but the not until May 2003 that the entire new State and City tax dollars were moved much of that commerce to money was to be matched and there Greenwich Village section of the Park being generated through construction Staten Island and New Jersey; and when was no specific commitment of funding opened to the public. wages, materials purchases, and sales the old elevated West Side Highway from the State. Between 1992 and 1995, By then, much had changed, and and transfer taxes. There was, in fact, collapsed in 1972, it simply hastened the Conservancy cleared much of the more was changing, in the area of an economic reawakening underway the decay and marginalization of the decay that made the waterfront so Greenwich Village directly opposite the along the waterfront, particularly where waterfront. By 1980, the area was threatening, created a walkway and new section of the Park. Starting in 1997, Hudson River Park was nearing comple- largely a wasteland, with the few remain- bike path along the shore that finally some of the larger adjacent properties tion. The question was how much of this ing businesses and warehouses provid- gave the public access to the River, had begun to change hands, though could be attributed to the Park. ing little return to the public in terms of encouraged temporary public uses of with only modest increases in sales This question became all the usefulness or tax revenues. several of the old piers that were still prices. By 2002, however, three new more relevant as the cost of maintaining Planning for a program to renew usable and carried out a three-year residential buildings were under con- the Park became clearer. The goal the West Side waterfront began in 1972, planning process that resulted in a struction in the area. In the years that had been to use revenues from the but the initial effort – the mega-project Concept and Financial Plan for the Park. have followed, those buildings opened commercial nodes plus some portion of known as “Westway” – was abandoned During this period, the financing and were sold out, sales prices have increased inland real estate taxes, to sus- in 1985 after years of controversy and concepts developed by the Task Force been among the highest in all of tain park operations and maintenance. opposition. In 1986, a West Side Task continued to guide the Conservancy’s Manhattan, and new projects have However, the concept of capturing a Force was formed by the City and the thinking for the new park, which was begun or been announced. What in portion of the increased real estate taxes State to recommend an alternative, to be built between 59th Street and 1980 had been a wasteland, both along was lost sight of early on; and while and the seed was planted for what Battery Park. Over time, however, the the waterfront and inland in the far West lease revenues have been sufficient to would grow in place of that project – mechanisms for securing the basic Village, has become one of the premier cover operating and maintenance costs a combination of park land providing capital money to build the Park became areas in the City (as the 1990 Waterfront for the first third of the Park, it has public access along the Hudson and more and more uncertain – and the need Panel had suggested would be the case). become increasingly clear that because some kind of economic development more and more urgent. In the end, the From visual observation, it was the commercial nodes are limited by to follow. State and City assumed responsibility for evident as early as 2001 that the new legislation and cannot be expanded, In 1990, the West Side providing the capital, while the revenues Park was having a positive impact on these revenues alone will not be enough Waterfront Panel, which succeeded the thrown off by the three commercial adjacent properties and was adding to cover the operating and maintenance Task Force, proposed what became nodes were expected to be enough to value to the City’s tax base. And as the costs of the entire Park when its Hudson River Park. In an era of reduced support ongoing park operations and new buildings began to take shape, development is complete. Moreover, no park funding, the Panel recommended maintenance. At the time, and for the anecdotal information – for example, mechanism is in place to cover the costs new funding mechanisms to assist in the next 10 years, very little attention was construction and maintenance of the paid to other economic development Park once it was built. The first of these that might be fostered by the new park. > was to set aside three commercial nodes One reason for this is that the within the Park itself, with the lease future of Hudson River Park remained Opportunities to relax on revenues from these nodes dedicated to uncertain until 1997, when the State park operations and maintenance; the made an explicit commitment to fund the waterfront were few second was to capture a portion of the the Park and match $100 million pledged and far between before the appreciation in inland real estate values by the City and took the steps necessary construction of the Park. attributable to the Park to cover any to appropriate it. Six months later, in capital costs that the State and City did June 1998, legislation was passed Couples on Pier 49, 1974. not provide directly. creating both the Park and a joint City- Over the next several years, State agency – the Hudson River Park planning for the Park went forward Trust – to build and operate it. Work on under the direction of the Hudson River the first section of the park in Greenwich Photo: Shelley Seccombe Shelley Photo: INTRODUCTION PAGE 1 INTRODUCTION PAGE 2 of long-term capital maintenance and President of the Jamaica Capital replacement. Corporation; and Glen Brill, an independ- So what is to be done? It is ent consultant who had participated in a this question that led to the study similar study for New Yorkers for Parks.